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What is a purchase return?
A buy purchase return occurs when a buyer profits products that it has bought from a provider.
Under the regular inventory system, the cost of the products that was returned is recorded as 1) a credit score to the common journal consideration Purchase Returns or the consideration Purchase Returns and Considerations, and 2) a charge to Records Due. (The supplier/seller will record the purchase return with a charge to Sales Returns and a credit score to Records Receivable.)
The credit score stability in the Purchase Returns consideration will partially offset the charge stability in the consideration Purchases.
Since the purchase return of bought products is time intensive (and therefore costly), having the separate common journal consideration Purchase Returns allows managers to quickly see the value of the profits.
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